Archive for Property Tax

Colorado Property Taxes: Will That 40 Percent Value Jump Really Mean 40 Percent Higher Taxes?

COLORADO STATE PROPERTY TAXES

In October 2023, Colorado Public radio published an interesting article about property taxes titled “Property Taxes Explained: Will that 40 percent value jump really mean 40 percent higher taxes? The CPR article states:

“Coloradans received some truly eye-opening letters from their county governments this year.

In parts of Western Colorado, the taxable value of the average home is 55 percent higher than just a couple years ago. It was an 80 percent average increase for Pitkin County. On the Front Range, Douglas County homes have gained 40 percent in value.

Those were the outliers, but not by much. The average Colorado home gained 37 percent in value over just two years, according to preliminary data analyzed by CPR News.

That story is well-known by now, as countless headlines have warned that sharp increases in value will lead to much larger tax bills next year. It’s also turned into a major political fight through the ballot measure known as Prop. HH.

Still, there’s a bigger question that’s gotten lost in the shuffle: How much are tax bills actually going to increase, and where would all that money go?

The short answer is — it all depends on where you live. But here’s what we’ve learned about the bigger picture:

Where are property values rising the fastest?"

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Written by | Posted in Colorado • Property Tax

Tax Advantages To Owning A Second Home

No matter the location, size, or value of a second home, certain tax advantages are built in. However, your opportunity to benefit from them depends on how you use the property.

Personal Use

Both property taxes and mortgage interest are as deductible for a second home as they are for your primary residence — and are subject to the same limitations. If you file a joint return, you cannot deduct interest on more than $1 million of acquisition debt ($500,000 for married persons filing separately) on one or two homes.

Two tax advantages of homeownership are not available for a second home — the immediate deduction of mortgage points when purchasing and the capital gain exemption when selling. Both tax breaks require the home to be your “principal residence.” However, you can deduct the points on your second home’s mortgage over the loan’s term.

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Written by | Posted in Deductibles • Property Tax

Are There Advantages To Owning A Second Home?

Whatever the location, size, or value of a second home, certain tax advantages are built in. However, your opportunity to benefit from them depends on how you use the property.

Personal Use

Both property taxes and mortgage interest are as deductible for a second home as they are for your primary residence — and are subject to the same limitations. If you file a joint return, you cannot deduct interest on more than $1 million of acquisition debt ($500,000 for married persons filing separately) on one or two homes. Read More

Written by | Posted in Capital Gains • Deductibles • Deductions • Property Tax

Should I Submit A Residential Property Tax Protest Annually?

If you’re a homeowner, a residential property tax protest should always be on your radar around this time of year – even if you filed one last year and won.

The truth is, property tax calculations are based on a lot of arbitrary data – data you just don’t have control of. Appraisal districts use recent home sales and other market info to create your home valuation, and in today’s market, a good chunk of properties are being over-valued. In the end, that means a higher property tax rate and more money out of your pocket – year after year. Read More

Written by | Posted in Property Tax • Texas Tax

6 Property Tax Protest Tips For Texas 2018 Deadline

Deadlines for property tax protests are quickly approaching, and if you want to lower your appraised value – and subsequently your annual tax burden – the time to act is now. To help you get started (and see success) we’ve pulled together some of our top property tax protest tips below. Use them to your advantage to lower your tax bill – both now and years down the line.

  1. Use a pro. When it comes to property tax protest tips, none is more important than this one. Using a professional to handle your tax protest comes with so many benefits. Most importantly, it gives you an expert, knowledgeable partner who can build your case and boost your chances of success. They know what it takes to win a protest, and they can make it happen. Using a pro also adds convenience for you. There’s no gathering of evidence or tedious forms, meetings or hearings. They do it all for you. It’s easy, simple and hassle-free.

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Written by | Posted in Property Tax • Texas Tax

Residential Property Tax Abatements: Are You Overpaying Your Property Taxes?

It is no secret that tax incentives are commonly offered to businesses in exchange for job creation and community development. It is lesser known, however, that tax incentives serving a similar purpose are also offered to owners of residential property. Community Reinvestment Areas, or “CRAs,” are designated areas within municipalities or unincorporated county areas that local governments designate as neighborhoods containing housing facilities or structures of historical significance and where “new construction” is discouraged. The underlying goal of establishing a CRA is to revitalize, rehabilitate, and remodel existing structures within the boundary of the CRA. Ohio currently has over 400 cities, townships, and villages with established CRAs. Read More

Written by | Posted in CRA • Property Tax

Real Estate Expenses After Acquisition Of Property For Tax Purposes

After a property is purchased, there is generally a time period that a property is held before it is developed. Common expenses that are incurred are property taxes and interest. Other expenses incurred can be classified as an operating expense, added to inventory cost or capitalized for tax purposes.

Property taxes and interest on vacant land are generally capitalized or added to the cost of inventory for real estate. These expenses on vacant land can only be deducted in the same tax year if there is property income received and the corporation is not in the business of development. Read More

Written by | Posted in Canada • International • Property Tax • Real Estate

British Colombia’s Property Transfer Tax Act Is Not As Simple As It Might Seem

British Colombia’s Property Transfer Tax Act (“PTTA”) currently taxes only registered transfers of realty. In other words, it essentially taxes transfers of legal ownership, but not transfers of beneficial ownership. Numerous BC governments have for years considered expanding the scope of the PTT to include transfers of beneficial ownership – without substantive action.

Recently, however, there has been word of possibly significant realty-related tax changes to be proposed in the upcoming provincial budget, which will be released tomorrow. An expansion of the PTT is not unthinkable, given that current Premier John Horgan put forth a bill himself in 2016 seeking to tax the disposition of a beneficial interest in land. Read More

Written by | Posted in British Colombia • Canada • Property Tax • TaxConnections

Construction Tax Planning: A Proactive Approach To Accelerated Depreciation Planning

Peter Scalise

A properly designed and implemented Construction Tax Planning engagement will proactively identify additional tax savings related to new and/or planned construction projects. It should be duly noted that a Construction Tax Planning engagement should not be confused with a Cost Segregation engagement as there are several noteworthy differences between a Cost Segregation Engagement and a Construction Tax Planning Engagement.

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Written by | Posted in Property Tax • Tax Planning

Personal Property Tax Issues

There is an interesting article in the San Jose Mercury News – “Silicon Valley’s stealthy, selfish war on taxes,” by Michelle Quinn (9/11/15).  She looks at some of the assessed values high tech firms have noted for their equipment, including $1.  She reports that some companies argue that the machine has no value to anyone else.  That seems odd.  But, it is a problem with a valuation tax, such as the property tax.

What is business personal property, such as equipment, worth each year?  Arguably, when purchased, it is worth what you paid for it, but it isn’t worth that much after that.  The valuation approach used does allow for adjustments down for subsequent years. The system also allows for lower values and appeals when necessary. Read More

Written by | Posted in Property Tax

Installment Sale – A Useful Tool To Minimize Taxes

Selling a property one has owned for a long period of time will frequently result in a large capital gain, and reporting all of the gain in one year will generally expose the gain to higher than normal capital gains rates and subject the gain to the 3.8% surtax on net investment income added by Obamacare.

Capital gains rates: Long-term capital gains can be taxed at 0%, 15%, or 20% depending upon the taxpayer’s regular tax bracket for the year. At the low end, if your regular tax bracket is 15% or less, the capital gains rate is zero. If your regular tax bracket is 25% to 35%, then the top capital gains rate is 15%. However, if your regular tax bracket is 39.6%, the capital gains rate is 20%. As you can see, larger gains push the taxpayer into higher capital gains rates. Read More

Written by | Posted in Capital Gains • Property Tax • Real Estate • Tax Planning

Busy Season Updates – Tangible Property Regulations And Affordable Care Act

Well into the start of busy season, the IRS issued important guidance on some parts of the Affordable Care Act (ACA) and how small businesses can adopt the tangible property regulations (TPR).  I’ve got a summary of the ACA updates (and beyond) in a short article in the 3/12/15 AICPA Tax Insider – An update on Affordable Care Act busy season developments.

Here is my summary of the TPR items as well as a recent news release by the California Franchise Tax Board on conformity with TPR.

Policy Item: Both the ACA items (particularly the relief from the $100/employee/day penalty for health reimbursement arrangements (HRAs) that violate ACA provisions), and the TPR Read More

Written by | Posted in Affordable Healthcare Act • IRS • Property Tax
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